No contract rules out trial


Last updated 09:53 24/12/2013
Mary-Jane Thomas
Southland Times Work to Rule employment law columnist Mary-Jane Thomas

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OPINION: Ms K was employed by P as an office administrator on March 5, 2013. She was not provided with a written employment agreement before her employment and on March 26 her employment was terminated without notice.

Ms K said she was unjustifiably dismissed without notice and sought payment of notice and compensation for the hurt and humiliation suffered as a result of her dismissal.

Surprisingly, in light of the clear case law to the contrary, the employer argued that because Ms K was verbally informed at interviews for the position that she would be employed pursuant to a trial period and that if, within one month of the start of employment it was decided she was not suitable, she would be terminated, and that a 90-day trial period applied to her employment.

The employer argued Ms K was dismissed "well within" the 90-day trial period and therefore she was precluded from bringing a claim of unjustified dismissal.

It was not disputed by Ms K that, at the job interview, she was told that it was standard for small companies in New Zealand to employ staff on a 90-day trial period and that her role would be subject to such a trial.

It was also not disputed that it was explained to Ms K that if, after one month of employment the employer felt she was not suitable, they "reserved" the right to terminate her employment.

Ms K said she accepted these terms but expected that a written employment agreement would be provided if she was offered the position.

Ms K started work on March 5. She was not given a written employment agreement before she started her employment. The failure of the employer to have a signed employment agreement containing the 90-day trial period meant that, at law, Ms K was employed as a permanent employee with no trial.

On March 19, two weeks after starting, she was asked to attend a meeting with two managers. At that meeting Ms L (Ms K's direct supervisor) said she felt Ms K was quite slow in doing her work. Ms K replied that she was slow but said that she had been in the job for only two weeks and felt she would improve. At the end of the meeting Ms K was told that it was standard procedure that another meeting would be held in two weeks' time to see how she was progressing.

In fact, one week later, at 5.15pm on March 26, Ms K was asked to attend a meeting with the same two managers. She was told that things were not working out. Ms K offered to discuss a mutual termination of her employment, including being given proper notice, but was told that no notice was required because she had been employed pursuant to a 90-day trial period.

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One manager then produced a written employment agreement dated March 18 which he asked Ms K to sign. She refused.

When she refused to sign the agreement she was asked to leave the premises immediately and not return.

On March 27, when she reported for work, she was not allowed to work and when she wrote a letter recording she attempted to go to work and requesting she be paid one week's notice, the employer did not reply.

The decision for the Employment Relations Authority was straightforward.

Trial periods must be agreed upon and evidenced in writing in an employment agreement signed by both parties at the start of the employment relationship.

A trial period can apply only to a "new" employee not existing or previous employees. Once an employee starts work they are not a "new" employee, they are an existing one.

If the trial period was valid and had complied with the law then Ms K would have been precluded from claiming an entitlement to notice and from bringing a personal grievance.

However, Ms K was never presented with a written employment agreement containing a trial period until the date of her dismissal and she had been employed for three weeks by then.

The trial period was not valid.

Once this was found by the authority then it was clear that she had been unjustifiably dismissed and the authority considered remedies.

Ms K sought the payment of one week's notice and that was ordered.

In addition, the authority awarded $3000 compensation.

Employers need to understand that a trial period can be used, but only under certain circumstances.

This is a classic example of the employer simply not knowing what they were talking about and it cost them money when, if they had simply provided an appropriate employment agreement at the start of employment, none of it would have happened.

» Mary-Jane Thomas is a partner at Preston Russell Law. E-mail questions to

- © Fairfax NZ News


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